Elephants and tigers (with red stripes)
Once again, an insightful series of articles from the Economist — this time about India and China, their politics and their economies. What’s good and what’s bad, and who can learn what from each other.
That India is an open society and China is not is one of the most glaring differences between the two. Some people in both countries are tempted to use it to explain another: that China’s economy has grown much faster. This survey will argue that this view is simplistic and misleading.
Some of the main reasons for China’s better performance have nothing to do with the political system. When China started its reforms, in 1978, it was poorer than India. Part of the gap now is due simply to that earlier start. But also, unreformed China seems to have done a more impressive job than India did in educating and providing health care for its poor. Reforms benefited from what economists call “good human capital”, and from a bulge in the working-age population that India itself is now experiencing.
India is often portrayed as an elephant: big, lumbering and slow off the mark. Now investment-bank reports are beginning to talk of it as a new Asian “tiger”. If that is what it wants to be, it makes sense for it to study China: the tiger in front is Chinese.
Update: Prashant Kothari blogs about a similar survey, from Standard and Poors. I am glad both these surveys try to address the myth that India is behind because it is a democracy.
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